Over the boom time I have seen many clients take out mortgages and with little concern for what might happen in the future. It was very much a live for today and worry about tomorrow, well tomorrow, and we all know tomorrow never comes.
Those carefree times are well and truly over now, and we are all staring a very different and unstable future full in the face. It is now more than ever that we should all be considering what protection we have. With interest rates rising and falling, and some people looking at rises in their mortgage payments of as much as 100%, now more than ever you need protection against the possibility of something leaving you incapable of making those monthly payments.
So let us consider what insurance actually means. It is not the concept of insuring against something happening but insuring against the consequences of that occurrence. For example, people tend to think that with life insurance, because they are healthy they do not require it. But this is illogical because it is not now that they should be considering but further on down the line. No one is immortal and no matter how fit you are now no one knows what the future has in store. If something happens to you and you are not covered what will be the consequence of your decision. And bear in mind that if you are healthy now the premiums of a policy will be very reasonable.
So what sort of coverage would you require from your insurance policy then? Well if you have a mortgage you will definitely what it covered. The type of coverage depends on the type of mortgage. If your mortgage is an interest only one then you will require a level term plan, and for a repayment mortgage you will want a mortgage protection plan. Also, critical illness cover is extremely beneficial. If you should succumb to the likes of cancer or a heart attack you will be assured that your mortgage will be paid off in full, even with a full recovery. The benefits of this speak for themselves, youll agree.
You should also consider payment protection insurance. This type of insurance will insure you mortgage payment itself against the chance of you going off sick or being made redundant. In this day and age redundancy is becoming more of a possibility for more of us as companies downsize and tighten their belts. Most payment protection policies will pay out for at least 12 months in a claim and some will go to 24 months, which if you are unable to work due to sickness accident or unemployment can be the difference between keeping your home or not.
Now what about your loved ones? If the worst did happen they would have the mortgage covered but could they get by with the absence of your regular income every week or month? If you think not then you might want to consider some sort of life cover.
When you have a family to consider, the best sort of cover to take out is family income benefit. It pays out either a yearly or monthly sum, and provides a payout similar to the income you would have been earning were you still alive. The idea is to take out cover for an amount similar to that which you or your partner are earning so that you can guarantee that amount of money as an income for your family in years to come.
So, to recap, given the current financial climate it is in your best interests to have a look at your own personal situation. Provide some sort of security on your mortgage and loans and think about a financial safety net for your loved ones because no one can tell for sure what's around the corner. These are important decisions so it would be in your best interests to seek proper professional advice, ideally from an independent financial advisor, so that you can make the appropriate choices. - 15224
Those carefree times are well and truly over now, and we are all staring a very different and unstable future full in the face. It is now more than ever that we should all be considering what protection we have. With interest rates rising and falling, and some people looking at rises in their mortgage payments of as much as 100%, now more than ever you need protection against the possibility of something leaving you incapable of making those monthly payments.
So let us consider what insurance actually means. It is not the concept of insuring against something happening but insuring against the consequences of that occurrence. For example, people tend to think that with life insurance, because they are healthy they do not require it. But this is illogical because it is not now that they should be considering but further on down the line. No one is immortal and no matter how fit you are now no one knows what the future has in store. If something happens to you and you are not covered what will be the consequence of your decision. And bear in mind that if you are healthy now the premiums of a policy will be very reasonable.
So what sort of coverage would you require from your insurance policy then? Well if you have a mortgage you will definitely what it covered. The type of coverage depends on the type of mortgage. If your mortgage is an interest only one then you will require a level term plan, and for a repayment mortgage you will want a mortgage protection plan. Also, critical illness cover is extremely beneficial. If you should succumb to the likes of cancer or a heart attack you will be assured that your mortgage will be paid off in full, even with a full recovery. The benefits of this speak for themselves, youll agree.
You should also consider payment protection insurance. This type of insurance will insure you mortgage payment itself against the chance of you going off sick or being made redundant. In this day and age redundancy is becoming more of a possibility for more of us as companies downsize and tighten their belts. Most payment protection policies will pay out for at least 12 months in a claim and some will go to 24 months, which if you are unable to work due to sickness accident or unemployment can be the difference between keeping your home or not.
Now what about your loved ones? If the worst did happen they would have the mortgage covered but could they get by with the absence of your regular income every week or month? If you think not then you might want to consider some sort of life cover.
When you have a family to consider, the best sort of cover to take out is family income benefit. It pays out either a yearly or monthly sum, and provides a payout similar to the income you would have been earning were you still alive. The idea is to take out cover for an amount similar to that which you or your partner are earning so that you can guarantee that amount of money as an income for your family in years to come.
So, to recap, given the current financial climate it is in your best interests to have a look at your own personal situation. Provide some sort of security on your mortgage and loans and think about a financial safety net for your loved ones because no one can tell for sure what's around the corner. These are important decisions so it would be in your best interests to seek proper professional advice, ideally from an independent financial advisor, so that you can make the appropriate choices. - 15224
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